Types of Business Loans

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Common Types of Business Loans & Financing

When you’re starting a small business, there are a lot of things to think about – and one of the most important is how you’re going to finance your venture. If you’re interested in learning about many of the different types of business loans and business financing methods, read on. First, you should know that not every business financing method discussed is a loan, as some business financing methods are not typical loans, such as business lines of credit, business credit cards, equipment leasing, etc. In this blog post, we’ll take a look at some of the different types of business loans and how they can benefit your small business. Keep reading to learn more!

SBA Loans

SBA loans are loans backed by the Small Business Administration and typically, but not always, may have lower interest rates than business loans offered by private lenders. There are several types of business loans available to eligible businesses, and one that is quickly becoming a top choice among newcomers is an SBA loan. Backed by the Small Business Administration, SBA loans offer lower interest rates when compared to other types of loans, making them ideal for businesses looking to borrow capital while staying within a set budget. Not only that, but depending on eligibility requirements SBA loans often come with plenty of added bonuses such as lenient due date structures or options for debt/credit consolidation – all without having to sacrifice your bottom dollar. If you’re setting out on the exciting journey of being your own boss, be sure to consider an SBA loan – it could end up saving you big.$.

Commercial Real Estate Loans

Commercial real estate loans may include multifamily loans or financing, fix-and-flip financing, apartment financing, retail real estate financing, office financing, factory financing, or any loan used to purchase or refinance commercial real estate. Commercial real estate loans are a business loan method used by companies who are looking to purchase or refinance commercial real estate property. This type of loan allows business owners to purchase an office, warehouse, retail storefronts, and other business-related property without spending all their own personal money. With a commercial real estate loan, business owners can borrow from lenders that have an understanding of the business environment as well as knowledge of the particular market area where the property is located. By obtaining a commercial real estate loan, business owners can gain access to flexible terms and competitive rates to help them make their business dreams come true.

Equipment Financing Loans and Leasing

Equipment financing loans or leasing deals are used to finance or lease new equipment for your business. When it comes to equipping your business to succeed, equipment financing can be a viable option. Through equipment financing, you can purchase the new technology and machinery you need for your business operations without having to come up with the full amount of cash upfront. Without having to liquidate financial assets or take funds out of other investments, you can free up capital and provide yourself with much-needed resources that allow you to stay competitive in the marketplace and better serve your clients. Whether you’re buying one machine or an entire fleet – equipment financing loans give your business a competitive edge and improved cash flow at the same time.

Business Term Loans

Business term loans are traditional business loans that are paid back over a set period of time, usually with a fixed interest rate. Business term loans are a common way to obtain funds for larger purchases such as cars, homes, or other investments. They provide an excellent opportunity to spread out payments over a set length of time while enjoying the benefit of a fixed interest rate. Longer loan terms can help to reduce your monthly payment while shorter terms can give you debt freedom sooner. Understanding how a term loan works, doing your research, and making sure it is right for you is essential when considering financing options. With careful planning and understanding of the advantages that come with a term loan, individuals and businesses can use them to their advantage.

Business Lines of Credit

Business credit lines are not loans, but rather revolving lines of credit. Business lines of credit can be used as needed, similar to a credit card, but typically have (*not always) lower interest rates. Business lines of credit provide a flexible way of funding purchases without having to worry about hefty interest payments. These credit lines are easier to manage and use than traditional loans, as customers can access only the necessary sum of money when needed, and repayment terms are usually much more reasonable. They can be handled in a similar way to credit cards, allowing customers to enjoy greater freedom and control over their finances and debt obligations. With many banks offering Lines of Credit with competitive interest rates, they can provide a great source of immediate funds and financial stability.

SBA loans, commercial real estate loans, equipment financing loans, term loans, and lines of credit are all great options for business owners who are in need of funding. All of these business financing options have their own pros and cons, so make sure you do your due diligence before applying for a business loan. But with careful planning and execution, any one of these types of loans can help you reach your financial goals. If you would like to compare business financing options, check out our business financing comparison page.

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